Kolkata, (IANS) Former Union Finance Minister P. Chidambaram on Monday cautioned against intolerance, saying it was an impediment to India's prosperity.

"We must create a more humane and tolerant society. We can't build a prosperous society unless it is tolerant, more humane, accepts diversity and adopts the philosophy of live and let live," Chidambaram said.

The senior Rajya Sabha member representing the Congress, was speaking at a session organised by IIM Calcutta in association with Observer Research Foundation on economic reforms.

"If intolerance leads to more and more conflict, it will certainly hold back... this country from becoming prosperous and rich," he said.

The debate on intolerance has been grabbing much public space over the past two years that saw issues like cow vigilantism coming to the fore.

Speaking on economic growth and inflation, Chidambaram said the Reserve Bank of India must strike a balance between price stability and economic growth by formulating monetary policy.

He also highlighted that the country needed tax revenue to finance public infrastructure in health and education.

"As we don't have sufficient tax revenue, public sector space in education and health is shrinking," Chidambaram said.

He mentioned that many of the top business houses in the 1970s and 1980s "could not survive in competition" in the post economic reform era.

"The space for new private entrepreneurs has shrunk. Country must continue to create opportunity for new entrepreneurs," he said while delivering the keynote address at the conference titled '25 years of Economic Reforms: Retrospect and Prospects'.

Chidambaram also said inequality increased in the last 25 years and prescribed raising the minimum wage across the board to reduce inequality. "It will increase some prices, but inequality is not acceptable," he said.

Raising concerns over the flexible fiscal deficit concept, he said that India must achieve the target of fiscal deficit in 2017-18. "We must remain below that level and should not breach it."